Moves to New York to trade on the NYSE through legitimate stockbrokers. His fortune has been reduced to $2,500 – Livermore’s trading is not always successful.

22

Loses all funds via unsuccessful trading on NYSE – he attributes this to slow execution of his trades. Borrows $500 and goes to St. Louis to trade in bucket shops. He returns to New York with $2,500, repays the $500 loan and resumes trading on both the Exchange and in bucket shops.

22

According to Livermore: “I was not quite twenty-three, all alone in New York with easy money in my pockets and the belief in my heart that I was beginning to understand the new machine. I was making allowances for the actual execution of my orders on the floor of the Exchange, and moving more cautiously. But I was still sticking to the tape – that is, I was still ignoring general principles; and as long as I did that I could not spot the exact trouble with my game.”

May 9, 1901

23

At the beginning of the day, Livermore’s fortune stands at $50,000. At the end of a frantic day’s trading, Livermore is broke. “The ticker beat me by lagging so far behind the market. The divergence between the printed and the actual prices undid me.”

1901

24

Livermore returns to the bucket shops and wire houses. He intends gettings a stake together to trade the Stock Exchange again. He is back to dealing in sums of tens and hundreds of dollars. He wins consistently.

The wire houses try to swindle Livermore and he responds with several sting operations in which he manipulates prices of thinly traded stocks on the NYSE in order to take large amounts from the wire houses.

1902

24

After a year of successfully trading the wire houses, Livermore has accumulated enough money to buy an automobile and take on an expensive lifestyle. He returns to New York for the third time with a “fair sized roll.”

Spring 1906

28

Makes a profit of $250,000 shorting stocks on a hunch that preceded the San Francisco earthquake.

Livermore shorts the market during a crash and makes his first $1 million.

Late 1907

30

Buys a yacht then loses $200,000 trading cotton.

1908

30 / 31

Livermore breaks his own trading rules – he takes advice from commodities expert Percy Thomas. Things go badly. Breaks his own trading rules again – increases his losing position in cotton and sells his winning position in wheat. Goes broke.

Leaves New York and goes to Chicago where a trading house, aware of his ability, offers him limited finance for trading.

Livermore is then summoned back to New York by Dan Williamson, owner of a Stock Exchange trading house. Williamson gives Livermore $25,000 to resume trading.

After three weeks trading, Livermore has made a profit of $112,000. Williamson interferes with his trading, buying and selling on Livermore’s behalf, and runs up losses. Livermore walks away from the relationship.

1914

36

In several years of a flat market, with “no money to be made,” Livermore’s debts have grown to well over $1 million.

He declares bankruptcy. Of this, he later said, “My mind now being free to take up trading with some prospect of success, the next step was to get another stake.”

February 1915

37

Livermore asks Dan Williamson for help. Williamson offers Livermore the (very small) facility to trade 500 shares. Livermore reads the tape for six weeks before making a trade – he needs to be 100 percent sure the trade will be profitable. Livermore buys Bethlehem Steel on high margin at $98. Steel is rising because of demand from World War I. The price moves upward as he expects and, as the stock rises, he buys more at $115. The following day he sells at $145. He has achieved what he set out to achieve – he has a sizeable stake again.

Late 1915

38

After several months of successful trading, Livermore’s balance stands at $145,000.

1916

38 / 39

Livermore plays the market perfectly – he is long when the market is strongly bullish and then goes short when it turns bearish. He makes $3 million profit and goes to Palm Beach for the winter.

1917

40

Livermore makes another $1.5 million profit and pays back all his debts from 1914. He buys $800,000 dollars worth of annuities (annuities explained) to ensure his family has a secure income should he ever be wiped out in the markets again. He also puts money into trusts for his wife and son.

1922

44 / 45

Gives interviews to Edwin Lefèvre for a series of newspaper articles. The articles are then compiled into a book – Reminiscences of a Stock Operator – now regarded as a classic.

1923

46

Moves to custom-designed offices in the Hecksher Building, Fifth Avenue. Livermore wishes to be further removed from Wall Street gossip and to enjoy more secrecy for his trading operations.

1925

48

In the 1925 wheat market Livermore buys grain in 5 million bushel lots while the market is rising, turns bear at the top and sells 50 million bushels short for a profit of $10 million.

1929

52

Jesse Livermore’s greatest moment as a trader. He goes short in the great crash of 1929 and makes a profit of around $100 million.

1933

56

The police are called when Jesse Livermore apparently goes missing. One day after disappearing he returns home, walking unsteadily. He says he spent the night in a hotel and awoke with a blank mind. Reading newspaper headlines about his disappearance brought him to his senses. His doctor’s verdict: “Amnesia nervous breakdown.”

1934

56

Jesse Livermore is bankrupt. He has lost his entire trading fortune. How he did this is unknown. He is not destitute – his family annuities save the day. He and his wife sail to Europe. “I hope to relieve my mind of some of my troubles.”

1939

62

Jesse Livermore writes How to Trade in Stocks – a book for people wishing to learn stock trading.

1940

62

How to Trade in Stocks is published.

November 28, 1940

63

Jesse Livermore dies by his own hand, via a revolver bullet through the brain. He had been suffering from depression and in his suicide note he describes his life as a “failure”.

Advertisements

Note: The timeline above was compiled using Reminiscences of a Stock Operator by Edwin Lefèvre and How to Trade in Stocks by Jesse Livermore as its principal sources. Some additional material from Time Magazine.

The accuracy of the timeline is not entirely certain because of discrepancies in Livermore’s age versus some of the dates mentioned in Reminiscences of a Stock Operator.

The timeline was the most consistent version of events that could be compiled using the sources.